‘Culture is Everything’: Sixth Street’s Alan Waxman on Flexibility and Alpha

Alan Waxman Profile & Firm Overview

• Co-founding Partner, CEO, and Co-Chief Investment Officer at 6th Street, a multi-strategy private capital firm founded in 2009 with over $115 billion in assets under management (AUM).
• Previously a Goldman Sachs partner at age 31, leading the Americas Special Situations group (predecessor to current Special Situations).
• Firm mandate focuses on identifying relative risk/reward across asset classes, industries, and geographies through a unified team approach.

Investment Philosophy & Core Lessons from Crisis

• Avoidance of Silos: Learned that organizations failing during the Global Financial Crisis (GFC) suffered from fiefdoms and a lack of collaboration; 6th Street enforces a "one team" culture to prevent this.
• Rejection of Tunnel Investing: Ability to see across multiple ecosystems allowed the firm to identify the housing market "time bomb" by October 2006 and avoid concentrated exposure in single sectors.
• Liquidity over Credit: Adopted David Weinberg's principle that crises stem from liquidity issues and mismatched assets/liabilities rather than credit issues, noting that humans systematically forget this pattern after crises pass.
• Early Escalation Culture: Prioritizes a culture where junior and middle-level employees escalate risks early; "bad news travels faster than good news" is actively encouraged to prevent blind spots.

Organizational Structure & The TAL Vehicle

• TAL Strategy: A $30 billion cross-platform vehicle encompassing the firm's 10 asset classes, 16 sector teams, and all geographies to maximize flexibility and migration to the best risk/return.
• Investor-First Architecture: Designed to avoid pressure to deploy capital into suboptimal "tunnel funds" simply to raise larger funds, allowing for $1B–$3B deals within a larger ecosystem.
• Collaborative Execution: Success relies on "playing tennis" with colleagues, sharing ideas and relationships; specific deals (e.g., Lloyds portfolio, Credit Suisse portfolio, Airbnb, Edge Connect) involved 50–75 personnel working across time zones to integrate diverse skill sets.

Market Opportunities & Sector Outlook

• Real Estate: Identifies a massive recapitalization need for assets acquired between 2019–2022; highlights a 7 million unit shortage in affordable housing with 49% of renters being cost-burdened as a primary investment opportunity.
• AI: Seeks to capitalize on high dispersion in business models across sectors, applying bottom-up fundamental analysis to distinguish winners in a rapidly changing landscape.
• Sports Ecosystem: Shifted from non-actionable to actionable during COVID; views sports as a "local-to-global" consumer opportunity enabled by technology, partnering with entities like the Spurs, FC Barcelona, Real Madrid, and the Dallas Cowboys.

Corporate Culture & Hiring Standards

• Core Definition: Culture is defined as "everything," specifically requiring the elimination of ego ("no fiefdoms, no silos") and a collective responsibility to "face the tiger" when problems arise.
• Personnel Fit: The firm actively removes high-performing individuals who cannot operate as team players or who prioritize individual heroics over collective success.
• Interviewing Process: All hiring, incentive systems, and processes are explicitly designed to validate the candidate's ability to work collaboratively across the firm's multi-strategy framework.

Lightning Round Insights

• First Investment: Involving the purchase of radio and TV loans from the failed bank Amoresco in Dallas (1999).
• Key Strength: Systematic judgment derived from observing conflicting debates among smart people, influenced by the book 13 Days and mentor David Weinberg.
• Defining Advice: "Face the tiger," learned from his father, emphasizing resilience in the face of hardship.
• Personal Excitement/Fear: Most excited and most scared by the trajectory of Artificial Intelligence.
• Personal Interests: Surfing, attending children's sports and dance recitals.

Record Date & Disclaimer

• Episode recorded September 3, 2025, featuring Goldman Sachs Exchange's "Great Investors" series.